India's Coal Production Grows 10.15% In May

In May 2024, India's coal production reached 83.91 million tonnes (MT) (Provisional), exhibiting a growth rate of 10.15% compared to the corresponding period of the previous year, which stood at 76.18 MT. During this period, Coal India Limited (CIL) achieved a coal production of 64.40 MT (Provisional), marking a growth of 7.46% compared to the same period last year, when it was 59.93 MT. Additionally, coal production by Captive and other entities in May 2024 stood at 13.78 MT (Provisional), reflecting a growth of 32.76% from the previous year, which was 10.38 MT.

Similarly, India's overall coal dispatches for May 2024 reached 90.84 MT (Provisional), up by 10.35% compared to the same period last year when it was recorded at 82.32 MT. During May 2024, CIL dispatched 69.08 MT (Provisional) of coal, with a growth of 8.50% compared to the corresponding period of the previous year when it was 63.67 MT. Additionally, coal dispatch by Captive and other entities in May was recorded at 16 MT (Provisional), reflecting a growth of 29.33% from the previous year, which was 12.37 MT.

Total coal stock with coal companies stands at 96.48 MT. The coal stock lying with CIL is 83.01 MT, while Captive and other companies hold 8.28 MT.

Ministry of Coal initiates India’s First Ever Pilot project for Underground Coal Gasification in Jharkhand

Under the strategic direction of the Ministry of Coal, Eastern Coalfields Limited (ECL) has embarked on an innovative pilot project for Underground Coal Gasification (UCG) at the Kasta coal block in Jamtara District, Jharkhand. This underscores the Ministry’s proactive diversification efforts within the coal sector. This first ever groundbreaking initiative aims to revolutionize the coal industry by using in-situ coal gasification to convert it into valuable gases such as methane, hydrogen, carbon monoxide, and carbon dioxide. These gases can be utilized to produce synthetic natural gas, chemical feedstocks for fuels, fertilizers, explosives, and other industrial applications. The Ministry of Coal is fully committed to promoting coal gasification projects, recognizing their potential to transform coal into various high-value chemical products.

Underground Coal Gasification offers a significant advantage by providing access to coal resources that are economically unviable through traditional mining methods. This pilot project represents a significant milestone for Coal India Limited (CIL) and its subsidiaries, positioning India as a leader in adopting advanced coal gasification technologies. In December, 2015, the Ministry of Coal approved a comprehensive policy framework for UCG in coal and lignite-bearing areas. In alignment with this policy, Coal India selected the Kasta coal block to implement UCG technology tailored to Indian geo-mining conditions. Managed by ECL in collaboration with CMPDI Ranchi and Ergo Exergy Technologies Inc. (EETI) from Canada, this project spans two years and comprises of two phases.

The first phase, which commenced on June 22, 2024, involves preparing a Technical Feasibility Report through borehole drilling and core testing. The second phase will focus on coal gasification at a pilot scale. This ambitious R&D project, funded by the CIL R&D Board, exemplifies collaboration between Eastern Coalfields Ltd and Ergo Exergy as sub-implementing agencies. The successful execution of this pilot project is expected to create transformative opportunities for India's energy sector, showcasing the sustainable and efficient use of the country's coal resources.

Ministry of Coal is to provide unwavering support for the successful implementation of this pioneering initiative and looks forward to its positive impact on India's energy landscape. This strategic initiative led by Eastern Coalfields Limited (ECL) represents a significant advancement in coal gasification technology, enhancing energy security and promoting sustainable development. As the pilot project progresses, it aims to establish new standards in coal resource utilization, contributing to India's journey towards energy self-reliance. The Ministry remains dedicated to fostering innovation and efficiency in the coal sector, paving the way for a resilient and environmentally sustainable energy future for the nation.

Outlook:

Over a long term, Coal demand in India looks well supported. A sustained pick up in India’s power demand will drive the Coal usage despite push towards green energy. Coal imports will remain a significant part of India’s energy strategy over the years. In near term, India, the world's second-biggest coal importer will continue to source the commodity as strength in economy supports power demand. The ongoing heatwave has turned out to be a critical factor in this mix and may continue to do so despite rising local output. India's coal production in first two months of the fiscal year that started in April saw an uptick of 8.8 per cent, according to data provided by the Ministry of Coal.

According to World Bank, in 2023, global coal trade is estimated to have reached a record high, increasing by 100 Mmt. The growth was largely driven by a 150 Mmt rise in Chinese imports, as domestic production could not keep pace with growing consumption. The bank notes that Coal prices are expected to decline by 28 percent in 2024 and a further 12 percent in 2025. Upside risks to the coal price outlook includes higher-than-expected growth in China’s consumption and various factors that could lower renewable electricity production, such as low rainfall or light wind conditions.

Downside risks include ample supply and weaker-than-expected global growth. The baseline assumption that China’s coal demand peaked in 2023 may be challenged by stronger-than-expected growth in power generation, as seen in 2021 or shortfalls in output from hydropower, as in 2023. Additionally, new coal mines are under development in China, and about 110 GW of coal plants were approved in 2023, indicating that domestic coal consumption could continue to rise.

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